9911796707
TMI Blog1993 (10) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute about the admissibility of deduction as such in the case of the firm. The Assessing Officer, however, after allowing the deduction has added the amount of deduction to the income of the firm for apportionment amongst the partners. Deduction on account of firm's tax had been allowed. Assessee, aggrieved by this action of the Assessing Officer appealed to the CIT(A) who has confirmed the action of the Assessing Officer. 2. Learned counsel for the assessee contended that the Assessing Officer has wrongly interpreted the proviso to s. 32AB which was inserted by the Finance Act, 1987 w.e.f.1st April, 1987. It was contended that once the income of the firm has been computed, the Assessing Officer had no jurisdiction to make the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the firm deduction shall not be allowed in the case of the partners. According to the learned Departmental Representative that is exactly what the Assessing Officer has done. As such it was contended that the appeal of the assessee is without any merit. 4. We have given our careful consideration to the rival contentions. Sec. 32AB had been incorporated by the Finance Act of 1986 w.e.f.1st April, 1986providing for deduction out of income from profits and gains of business or profession subject to fulfilment of certain conditions. Since the assessee has fulfilled the conditions as provided under s. 32AB deduction was allowed to the tune of Rs. 91,250. A proviso has been inserted by the Finance Act of 1987 w.e.f.1st April, 1987which reads a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The question of deduction under s. 32AB would arise in the cases of partners of the firm and not in the case of the firm itself. As far as the firm is concerned it is not disputed that deduction under s. 32AB is permissible on it. The proviso to s. 32AB comes into operation only in computing the income of the partner of the firm. The language of the proviso is unambiguous and the emphasis is on 'deduction' under s. 32AB in the computation of the income of the partner. When income of the firm is determined the share is to be allocated under s. 182 and thereafter if any deduction is claimed by the assessee under s. 32AB such deduction shall be denied on the ground that similar deduction has been allowed in the case of the firm. The proviso in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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